Kevin Keough likes to say that the “universe is unfolding as it should” at PC Gold‘s (PKL-T) Pickle Crow property in northwestern Ontario.
Last March, high-grade gold assays from the company’s newly discovered No. 19 vein at the past-producing Pickle Crow mine sent its shares flying off the shelves — and moving from about 68¢ apiece to a high of $1.90 over the course of several days.
The best intercept came from Hole W02, which struck 13.1 metres grading 43.28 grams gold per tonne starting at 530.4 metres and included 4 metres averaging 138.89 grams gold.
“The property steadily is giving us what we thought it would,” Keough, PC Gold’s president and chief executive, explains in an interview. “We proved something with the 19 vein discovery and we think there will probably be more like this lurking near the mine.”
Keough describes the No. 19 vein as a major new discovery at moderate depths right next to existing workings that confirm the potential for the property to host a multi-million ounce resource.
The No. 19 vein is hosted within the same porphyry body as Pickle Crow’s historic and top-producing No. 2 vein, he explains, adding that the porphyry remains mostly unexplored lateral to, and below, the workings. (The No. 2 vein produced several hundred thousand ounces of gold.)
Pickle Crow is one of Canada’s best known past-producing gold mines. The underground operation was consistently profitable and paid a dividend to shareholders just 11 months after production began. Operating from April 1935 until September 1966, the mine produced 1.45 million troy ounces of gold at an average recovered grade of 16.14 grams gold per tonne, and about 168,757 troy ounces of silver at an average recovered grade of 1.88 grams silver. It eventually closed due to increasing costs and a gold price of just US$35 per oz.
The mine is about 100 km south of Goldcorp‘s (G-T, GG-N) underground Musslewhite mine. (The road to Musslewhite clips the corner of the Pickle Crow property, Keough notes.)
PC Gold was set up in 2008 and IPOed in March of that year at $1 per share, raising $11.5 million. The markets collapsed shortly thereafter.
“We went down like everybody else,” Keough says. “Nonetheless, we’ve just been methodically doing the work up there now for the last two and a half years and we’ve had a drum beat of successful intercepts.”
The latest big discovery, he says, is an entirely new and large-scale gold-arsenic system the company is calling Central Pat East, about 2 km northwest of the old Pickle Crow mine and 6 km northeast of the past-producing and high-grade Central Patricia mine, which Keough says hosted arsenopyrite-rich mineralization similar in style to that of Central Pat East.
On Jan. 10 PC Gold announced results from drill holes 105 and 108, which cut broad intervals of disseminated arsenopyrite with associated gold in metasediments (argillites, tuffs, banded iron formation), including subintervals of semi-massive arsenopyrite with associated quartz veining and flooding.
Hole 108 returned 0.70 gram gold per tonne over 137.50 metres (from 114 to 251.5 metres depth), including 2.05 grams gold over 35.65 metres, 3.26 grams gold over 17.35 metres, 5.36 grams gold over 9.02 metres and 26.58 grams gold over 1.5 metres. Hole 105 cut 0.24 gram gold over 134.07 metres and assays from a third hole, 109, are pending.
Keough notes that the discovery is unlike anything the company or previous operators have ever drilled on the Pickle Crow property and given its proximity to the mine, could be complementary to its development.
“The Central Pat discovery is the most significant since the mine closed in 1966,” he asserts. “What we’ve drilled into is a very big gold-arsenic system so it’s not narrow veined. The mineralization permeates all the lithologies at the discovery site.”
According to Keough, at the past-producing Patricia mine, which extended to a depth of 4,100 feet, the gold-arsenic footprint was quite limited to the iron formation, with 20-30 metre true widths. The Patricia mine had continuity down dip or down plunge, he says, but it didn’t have the very broad footprint that Central Pat East has.
“Central Pat East is wide open in all directions and has a footprint of about 400 metres in planned view-like a bird looking down, it’s the width of the system,” he explains. “And that’s just what we’ve currently drilled. It’s that wide and frankly it’s open to the north so we really don’t know how wide this thing could ultimately become.”
Central Pat East is also open to the east and west and a unique thing about it, Keough continues, is that there is a one-for-one correlation between the gold and the arsenopyrite. “This is typical in many camps in Ontario and Quebec, and you can follow the arsenic and it can lead you to the gold, but they never had this in the Patricia camp so we’re excited by its implications.”
The area at Central Pat East is heavily covered in glacial till or muskeg, he adds, which is essentially tree-covered swamp and has never been drilled before.
PC Gold has three drills running on its Pickle Crow property, two at Central Pat East and the third is busy drilling the No. 19 and No. 21 vein discoveries at the mine site.
Of course drilling at the Pickle Crow mine is not without its challenges, admits Keough, who earned his geology degree from Queens University in Kingston. From April to August last year the company encountered problems such as hole deviation, when the drill bit would swing wildly from horizon to horizon. There were other issues too, such as gas hits.
But Keough is nothing but confident.
“In its historical configuration Pickle Crow would be too small for the big, big companies today,” he says. “But if we can prove that this has a multi-million ounce resource in it, and I think we’re going to do it, then I can tell you there will certainly be interest among others.”
Currently PC Gold has about $15 million in its treasury, and expects to put out a compliant resource estimate on Pickle Crow over the next three months.
In Toronto at presstime, PC Gold was trading at 86¢ per share; the junior has about 66.2 million shares outstanding.
So how does he explain the dismal share price performance? No doubt helped by his disposition of 350,000 shares since April last.